Five takes from the Kavedon Family on building a solid business during uncertain times — Part 2

Carol Tarr — Portfolio Manager

Kavedon Kapital
7 min readJul 13, 2022

In these interviews, taken between May and June 2022, four Kavedon Kapital partners and a portfolio manager share their experiences and learnings from previous crises with visions for thriving in current conditions. With multiple crashes weathered between them, they have a broad overview of the effect of cycles on the startup ecosystem, the opportunities they provide and how to leverage all types of conditions for growth, profitability and, most importantly, during these critical periods: survival and renewal.

This is Part 2 of the series — Part 1 can be found here

When the sun shines, everyone focuses on the land grab and being the best. Now return to focus on the basics: getting to profitability.

Andrew Hughes, Head of Founder Relations at Kavedon Kapital

Founding and thriving in a storm — I know your pain

We founded a games studio in 2011 in Athens, Greece, at the tail of the financial crisis, a profoundly unstable economic era and geography far outweighs today’s fears. Founding in Greece when the world looked upon that country in total economic collapse, crazy, right? Maybe but trusting in the people, my team, made the difference as it will again in this crisis, wherever you are. So, I know your pain.

Don’t Panic!

The positives from back then apply to today’s founders: when there is a sense of urgency to create stability, people work harder, more intelligent and faster simply because they have to. But remember: Don’t panic! These cycles will come and will go. We’ve had the financial crisis, the pandemic, and many before that. A crisis can bring fresh energy and ideas. Don’t focus on all the news; keep your head down and focus on the basics:

  • ensure that the team is stable through constant communication
  • lead from the front with attitude and conviction
  • product is evolving through data points gathered from users
  • ensure your customer’s needs are met through dialogue and commitment

“Don’t wait for inspiration”, Picasso once said, “inspiration happens, but it has to catch you working”. In other words, keep your head down and graft.

Investors’ focus has profoundly changed.

No longer is there vanity in revenues and land-grab; profitability is the new focus whilst still demonstrating scalability is what investors will look for. Run a tight ship and watch every penny or cent. Turn the dials up:

  • If you modelled for 10 new client wins this year, win 12 or more
  • If you targeted 10% upsell into clients, strive for 20%
  • If you supercharge your KPIs, you will succeed.

New era, new ideas

Business models evolve all the time. Use this time to discover or try new revenue streams in addition to, not instead, your core revenue streams. Be explorative. For example, the ‘freemium’ model in content came about in the last downturn; this fundamentally changed content consumption for many industries and ensured the survival of many. The more recent subscription-based companies may well be under consumer scrutiny as households reign back fixed monthly costs; try implementing a greater choice, offers and reward mechanisms to retain as many as you can. And be reading and willing to pivot.

The circular movement of talent

Of course, companies will let folks go. Still, the talent market has been difficult for so many, with the Tier 1 tech companies hoovering up talent so the competition couldn’t, drying up opportunities for most and distorting salary expectations. It’s now a buyer’s market at last. Currently, the circular movement of talent is actively seeking well-run start-ups. This has been sorely missed and offers founders a wealth of choices to bring in additional firepower and experience.


Surround yourself with the best advice from those with experience steering a company through more challenging times. Grey hairs are worth their weight in gold if you attract the best and brightest.

It’s down to you

A founder is leading a family, not just a business; those around you will look for strength, leadership and communication — be that founder.

Maintain hope but don’t rely on it. Strategy is what you need.

- Steve Hughes, Partner at Kavedon

Staying True to the Dream.

Currently, there is constant pressure on businesses across the globe, stretching people’s limits. These external factors, pandemics or economic booms, are exaggerated versions of what Founders face when growing a business. Ultimately, Founders take the brunt of these stresses and strains. How do they survive and thrive during challenging times?

A key question is how do Founders keep strong and motivated to deal with the pressures of a downturn. ‘Hope’ alone is not a strategy. To remain motivated, I believe Founders must focus on what business they initially wanted to build. This isn’t a slavish adherence to ‘the vision’, where failure is prefered to compromise. We’ve all met ex-Founders with that attitude. Instead, concentrating on the dream that motivated them first and keeping it in clear focus can, crucially, provide clarity and resilience of thought and action.

How true can you be to the dream?

Are there things in the world that can swamp any Founder or business? Obviously, yes. Many companies failed during past recessions, but many didn’t. I believe we’re most responsive when we are going into hard times and when we’re coming out into a recovery. During these times, Founders must learn to roll with the punches, which can be difficult, but clarity on what you want to build is vital.

Although based in London, I was a company director in Asia at the beginning of the pandemic. Asia was the first to understand the gravity of the situation, and, initially, it wasn’t easy to understand the potential impact of COVID19 in London. We were first alerted to a likely China lockdown in late January 2020 but realised its influence was of global proportions, with all our main markets affected.

Our response reflected the company built by the Founders. We knew who we were and what we wanted to be even in the bleakest of times, and crucially shareholders, founders and investors all bought into the long-term vision for the company. That gave us a common point of reference, something to bind us together and provide clear direction for our actions.

We didn’t anticipate additional help from governments and agencies — we hoped for it but couldn’t rely on it. Remember, hope is not a strategy. Nevertheless, we understood the need to get additional cash in the bank to keep our core vision alive and went through small financing round in weeks. The decisiveness of our actions resulted in us staying cash positive, which allowed us to enact a plan to ride out the global lockdown and be able to respond immediately when the world opened for business again.

We tried to minimise compromising the core vision because we understood it’s what motivated us, what gave us an understanding of the markets we served and the customers with whom we had built relationships. Despite this, did we need to hustle to ensure survival? Did we need to change how we delivered our products and services to reflect a post-covid world? Did we take advantage of the subsequent government assistance schemes available to us? A resounding ‘yes’ to all.

Where we find ourselves today is very different. There is a massive difference between a complete stoppage and a slow-down. Of course, you want governments to work with business during these times, and perhaps there is a presumption that governments will step in, but we can never rely on it. As a result, government support, particularly from more conservative governments, will be less forthcoming, and businesses will fail. But inevitably, the economy will recover with new opportunities for those who have weathered the storm and a new generation of Founders and enterprises building their future.

Earlier I mentioned concentrating on the motivating dream for clarity AND resilience to thought and action. Resilience is not just the Founder and their ability to take the pressure. It can be built into the company and business model and planned to respond directly to an economic downturn.

Although often described as ‘risk-takers’, Founders are better described as risk judges, in my view. I don’t think it is an issue of risk-taking or risk-aversion. It’s about effectively judging risk and change, planning and responding sensibly. Therefore we can look at threats to come and put in place new plans, processes and methods to increase survivability whilst remaining true to why the Founder is the Founder. Depending on the business, this could include:

  • shortening supply chains to ensure more consistent delivery,
  • reducing reliance on external contractors in geographies where economic impacts may be radically different to those we face close to home,
  • reducing or increasing inventory to flex with likely changes in demand, or
  • adopting new SaaS models to take advantage of new working methods and the need for everywhere to be an office.

Returning to the question: how true can you remain to your original dream, and how can you use it to guide positive action through rough times?

If you are an Investor realising the importance of switching to a Venture Capital model built on Circular Economic principles, get in touch with us to learn more about how Kavedon Kapital can help.

Our deal room is also open, so all hi-tech early stage Founders please head over to this page to submit your deck.

If you want to help us, share this article and follow us:





Kavedon Kapital

Kavedon Kapital is Venture Capital Fund Entity designed and built on Circular Economics